The market is sometimes demanding. Yesterday’s
negative reaction was possibly due to cautious current trading in Q1 2016 and
profit guidance, which seemed to have disappointed some investors. Admittedly,
the new 2016-18 earnings target (to grow at 1.5x sales) is lower than the
historical “rule-of-thumb” (2x sales) but was no surprise to us since
management stated several times in 2015 that the historical “rule-of-thumb”
could hardly be reiterated for a seventh year in a row. Achieving this targeted
operating leverage in a context of significant investments is also reassuring
in our view, especially since the group also expects to increase ROIC. Buy
recommendation and FV of EUR65 confirmed.